Boone & Kurtz Contemporary Business 15th Edition Chap 5-6

independent business with fewer than 500 employees, not domain in it is market.

Home-based Business

firms operated from the residence of the business owner

Business Plan

written document that provides an orderly statement of a company’s goals, methods, and standards.

Small Business Administration (SBA)

principal government agency concerned with helping small U.S. firms.

Microloan

small-business loans often used to buy equipment or operate a business

Business Incubator

local programs designed to provide low-cost shared business facilities to small start-up ventures.

Venture Capital

money invested in a business by another business firm or group of individuals in exchange for an ownership share.

Franchising

contractual business agreement between a manufacturer or other supplier, and a dealer such as a restaurant operator or retailer.

Franchisee

individual or business firm purchasing a franchise.

Franchisor

Firm whose products are sold to customers by the franchisee.

Sole Proprietorship

business ownership in which there is no legal distinction between the sole proprietor’s status as an individual and his or her status as a business owner.

Partnership

association of two or more persons who operate a business as co-owners by voluntary legal agreement.

Corporation

legal organization of two or more persons as co-owners by voluntary legal agreement.

S Corporation

corporations that do not pay corporate taxes on profits; instead, profits are distributed to shareholders, who pay individual income taxes.

Limited-liability Corporation (LCC)

corporation that secures the corporate advantage of limited liability while avoiding the double taxation characteristic of a traditional corporation.

Employee ownership

business ownership in which workers buy shares of stock in the company that employs them.

Not-for-profit Corporations

organization whose goals do not include pursuing a profit.

Public Ownership

a unit or agency of government owns and operates and organization.

Cooperative Ownership

collective ownership whose owners join forces to operate all or part of the activities in their firm or industry.

Domestic Corporation

A firm is considered domestic in the state where it is incorporated.

Foreign Corporation

A firm is considered foreign in the states other than the one it has filed incorporation papers.

Alien Corporation

A firm operating in one nation other than the one it is incorporated in.

Stockholders

owners of a corporation due to their purchase of stock in the corporation.

Preferred Stock

shares that give owners limited voting rights, and the right to receive dividends or assets before owners of common stock.

Common stock

shares that give owners voting rights but only residual claims to the firm’s assets and income distributors.

Board of Directors

governing body of a corporation.

Merger

agreement in which two or more firms combine to form one industry.

Aquisition

agreement in which one firm purchases another.

Vertical Merger

merger that combines firms operating at different levels in the production and marketing process.

Horizontal Merger

merger that joins firms in the same industry for the purpose of diversification, increasing customer bases, cutting costs, or expanding product lines.

Conglomerate Merger

merger that combines unrelated firms, usually with the goal of diversification, spurring sales growth, or spending a cash surplus in order to avoid a takeover attempt.

Joint Venture

partnership between companies formed for a specific undertaking.

Entrepeneur

a risk taker in the private enterprise system, a person who seeks a profitable opportunity an takes the necessary risks to set up and operate a business.

Classic Entrepeneur

a person who identifies a business opportunity and allocates available resources to tap that market.

Serial Entrepeneur

a person who starts one business, runs it, and then starts and runs additional businesses in succession.

Social Entrepeneur

a person who recognizes societal problems and uses business principles to develop innovative solutions.

Lifestyle Entrepeneur

a person who starts a business to gain flexibility in work hours and control over his or her life.

Seed Captial

initial funding used to launch a company

Debt Financing

borrowed funds that entrepreneurs must repay.

Equity Financing

funds invested in new ventures in exchange for part ownership.

Venture capitalists

business organizations or groups of individuals that invest in early-stage, high-potential growth companies.

Angel Investors

wealthy individuals who invest money directly in new ventures in exchange for equity.

Intrapeneurship

process of promoting innovations within the structure of an existing organization.

Skunkworks

project initiated by an employee who conceives an idea, convinces top management of its potential, and then recruits hum and other resources from within the company to turn the idea into a commercial project.

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